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At a meeting of the Russian federal Cabinet on Sept. 26, Prime Minister Mikhail Kasyanov abruptly yanked all discussion of reforming Gazprom -- the country's state-run natural gas giant -- from the agenda.
Gazprom's multitude of minority investors, who had been looking forward to the results of the meeting, were left stunned. This comes as no surprise to Stratfor. The reform of Gazprom already has been "temporarily suspended" for nearly two years, and taking on a challenge as large as Gazprom with both legislative and presidential elections scheduled within the next seven months would hardly be a deft political move.
Few (aside from Gazprom executives) argue that the natural gas giant is not in need of a major overhaul. The company controls nearly every natural gas asset from the old Soviet Union, making it Russia's largest company and the world's largest natural gas firm. But it also sports the same network of cronyism, patronage and murky management that held the Soviet economy loosely together. Splitting up the company into independent transmission, distribution, production and export arms would spark competition, raise output, speed the modernization of the Russian natural gas network and ultimately translate into better oversight and higher profits. Considering that Gazprom is already Russia's largest taxpayer, this is no small issue for the Kremlin.
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